Absa Bank Botswana’s profit fell in 2025 as rising operating costs, higher impairments and margin pressure offset modest revenue growth in a challenging economic environment. Profit before tax declined to P951.6 million from P1.06 billion in 2024, while net earnings dropped 12% to P740.9 million, despite total income increasing 5% to P2.39 billion.
The bank’s performance reflects a difficult operating backdrop marked by tight liquidity, subdued economic activity and weak diamond demand, which continued to weigh on Botswana’s economy. Net interest income declined 7% to P1.42 billion as interest expenses surged 41%, driven by higher funding costs and competition for deposits. At the same time, credit impairments rose 22% to P109.3 million, pointing to a still fragile credit environment, even as recoveries improved.
Non-interest income provided some support, with fee and commission income rising 10% and trading income jumping 67% on stronger market activity. However, this was outweighed by a sharp 17% increase in operating expenses to P1.33 billion, driven by staff costs, technology investments and higher administrative expenses, pushing the cost-to-income ratio up to 56%.
The balance sheet remained resilient, with total assets growing 5% to P26.9 billion and customer deposits rising 7% to P20.7 billion, signalling continued customer confidence. Loans and advances increased 6% to P18.6 billion, supported by demand across key segments, while capital levels remained above regulatory requirements despite a decline in the capital adequacy ratio to 18.05%.
Absa declared a final dividend of 57.74 thebe per share, amounting to about P492 million, underscoring its continued capital strength.
Looking ahead, the bank expects operating conditions to remain tight in 2026, with liquidity constraints, elevated funding costs and global uncertainties continuing to shape performance. However, it is betting on digital transformation, revenue diversification and sustainable finance initiatives to drive growth as Botswana’s economy gradually recovers.